CROPS  (CONT)

China National Petroleum said last month that it would develop a biodiesel project in the southwestern province of Sichuan. The plant will have output of 100,000 tons of biodiesel and 600,000 tons of ethanol a year by 2010. The venture will use Barbados nuts, planted locally for feedstock, to produce biodiesel, and will use yams to make ethanol.

China National Offshore Oil Corp., or Cnooc, signed an initial agreement in July with a Malaysian company to develop palm oil-based biodiesel, said Liu Junshan, a spokesman for Cnooc in Beijing. The agreement was signed by a Cnooc unit, the Cnooc Oil Base Group, and by Bio Sweet of Malaysia, according to the Malaysian national news agency Bernama.

"I don't think China is going to be very happy to see a lot of edible oils, whether locally made or imported, used for consumption in biodiesel," Chris de Lavigne, global vice president at the consulting firm Frost & Sullivan in Singapore, said during an interview Friday. "China actually has a huge deficit for edible oil and this will only increase in the future."

Agricultural Bank of China, with more branches than any other Chinese bank, will be kept intact under a plan to sell shares and cut the worst bad loans made by Chinese financial institutions, according to a document obtained by Bloomberg News.

The Chinese government plans to reject a plan to split up the state-owned bank, aiming instead to sell stakes to investors next year, according to a transcript of remarks made by Prime Minister Wen Jiabao to a closed-door committee this month. The State Council has verified the transcript.

Wen's challenge is to attract investors to the weakest of the four biggest Chinese banks to help it go public while preserving services for the farmers served by its 31,000 branches. A bailout of Agricultural Bank could cost $200 billion, almost 13 times what the government spent recapitalizing Industrial & Commercial Bank of China.

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